Our real-world testing was highlighted in the Harvard Business Review
The massive shift in behavior accelerated by the events of 2020 is causing a follow-on lurch in marketing—marketers are sprinting to keep pace with a customer whose behavior and attitudes have changed in a matter of months.
The massive shift in behavior accelerated by the events of 2020 is causing a follow-on lurch in marketing—marketers are sprinting to keep pace with a customer whose behavior and attitudes have changed in a matter of months.
What are the behavior shifts? Many of them—more online purchasing, low-touch delivery, a focus on essentials—feel up close and personal to anyone who lives in a place that has experienced high rates of coronavirus. Others—changing attitudes toward privacy, for example—appear less direct at first glance. McKinsey and RIS both have useful lists that document major shifts.
At Spark, we are seeing our clients respond to effects of the pandemic, Black Lives Matter protests, and the upcoming election.
1- Companies that lacked a productive online presence are rushing to build one.
2- Most are shifting more marketing dollars online.
3- And the new product development pipeline—from startups to established companies—is (to our surprise and delight) stronger than ever.
But all of this moving about is putting strains on marketing organizations. Customer acquisition strategies that used to work are flailing, and moral stands like the Facebook boycott complicate responses to a shifting marketing landscape. Marketing requires more hustle than ever before. Below, a few observations from the Spark front lines.
The mad marketing scramble of the early pandemic months has become the norm: marketers are taking nothing for granted, and the ability to improvise in the face of massive uncertainty means the shape of marketing spend—and marketing—is changing.
PAIN. Nimbleness is taking its toll. Agencies are downsizing to the tune of 52K jobs, and there is hand-wringing about the end of the traditional ad agency. Digital—not just marketing-related but the tools and platforms that automate doing business in general—are spelling doom for bloated marketing organizations.
GAIN. What we’re seeing: marketers are building new muscle, and it’s driven by necessity. They are changing out old agencies and campaigns and experimenting with new creative and new outreach channels. As revenue falters in existing segments, they are repositioning existing products, inventing new ones, and targeting customers they might not have considered before. There’s an appetite for experimentation and learning that wasn’t there before. Frankly, we’re thrilled—and hopeful that the reset drives growth and opportunities for the downsized.
The Facebook ad boycott that took place in July (and beyond) was complex. Were brands really taking a moral stand against algorithm-enhanced hate speech? or were they continuing a pullback already in progress on an ad platform that had lost some luster?
And the boycott created a quandary for sympathetic direct-to-consumer brands whose businesses depend on the Facebook/Instagram platform. When most of your revenue comes from customers acquired on Instagram, a boycott has an existential twist. As a result, most of the DTC companies kept a very low profile on the topic and more or less moonwalked right off the boycott stage while everyone was looking at Patagonia and Ben & Jerry’s.
The boycott exposed a problem for marketing organizations: over-reliance on a single channel. If you’re, say, Disney, you’re already invested in a range of advertising channels, but many small- and medium-sized businesses don’t have the luxury of a quick reallocation of spend to other platforms.
The solution: hedge.
Acquiring most of your customers in a single channel is kind of like depending on a single customer for a huge portion of revenue—it’s risky. Marketing organizations need to diversify. We’re working with clients to test channels they’ve never used before to create alternative customer acquisition strategies, especially as more ad spending moves online.
The goal isn’t necessarily a complete portfolio of outreach channels—it’s really a way to give marketers some moves 🕺, whether for the next boycott or shifts in relative ad platform costs.
It’s a scary time to launch something new. With consumer behavior in flux, go-to-market strategies can misfire—or discover the target has moved.
Companies are using a range of approaches to de-risk new product launches. We’re working with clients to validate demand for new products prior to launch by using ad campaigns to test positioning with different audiences. Other new brands are using pre-orders to reduce inventory risk. Still others are going direct in order to have more control over brand presentation and customer relationship.
What does this mean for marketers?
HUSTLE. Experimentation, testing, and analytics. Starting small before you go big. Optimizing by audience. Hedging.
MUSCLE. New skills in house to manage direct customer relationships, experimentation, and all-digital product launches.
Are you ready for your workout?
